Kagame backs private-public sector dialogue

• By Frank Kanyesigye

President Kagame addresses business leaders at the Presidential Investors’ Round Table at Petit Stade in Kigali yesterday. The New Times / Village Urugwiro.

President Paul Kagame has strongly backed the public-private sector dialogue as a channel that will address the challenges hampering the improvement of doing business in Rwanda.

The transport sector is one of the areas where publi-private partnerships are essential. The New Times / File.

The Head of State made the remarks yesterday while meeting members of the private sector in a dialogue known as “Presidential Investors Round Table” in an event held at Petit Stade in Kigali.

The annual event organized by the Private Sector Federation (PSF) to give business leaders/investors in the country an opportunity to dialogue with the President and share ideas on issues pertaining to the private sector also attracted members of the public sector.

“Private sector is a pillar for social and economic transformation of our country and I support the dialogue between the private and public sector to seek solutions to the challenges that might be affecting the growth of the private sector,” said Kagame.

He observed that Rwanda has come far to achieve the developments and there was still a long way to go to realize the country’s development strategies, which he said strong partnership between the private and public sector was needed to realise the government’s development vision.

“Our development will be a result of how hard we work and collaborate to achieve mutual benefits because if we don’t, the consequences of not working hard will be very difficult for us to address,” the President emphasized.

He added that if people don’t work hard to develop themselves and their country, they will end up being poorer and start begging, the rich will step over the poor, which will end up putting the country into dilemma.

Kagame urged the private sector to include everybody in their business growth. “When you own a business, it’s not just about your profit, it is about all those (Rwandans in general) who help you achieve it. We must continue to work hard to ensure the benefits are shared by all.”

On Rwanda’s GDP, the President said that, there is a need to double or triple it from 10 percent to 20-30 percent and this will come from working hard and strong partnership between the private and public sectors.

“For all of you who have heard the testimonies of success today, have you ever heard that people can be successful without hard work....? There is no body, even if luck is there in life it goes hand in hand with hard work,” the President emphasized.

“The dialogue like this provides a platform where we address challenges and find solutions together and improve the business environment in this country.”

The forum that was held under the theme “let us support development through dialogue between public and private sector” brought together over 2500 members of the business community/investors from all the four provinces and the Kigali City.

The President then held an interactive session with members of the private sector who asked him a wide range of issues including the unfavourable labour laws, the investment code, pension for foreigners, skills gap among workers, challenges in health, and energy sectors among others.

Reacting to some of the challenges raised at the forum , the President asked the private sector why delay their work to reach at the extent of being fined by the government, adding that fines should be applied to both private and public sector for late payments.

Kagame also challenged the private sector to employ skilled people who know what to do and encouraged Rwandans to learn vocational and technical skills and stop relying on expatriates.

The Head of state urged the private sector to invest highly in the energy and ICT sectors and also called upon the public to change their mind set regarding the use of ICT.

“ICT should benefit all people in this country starting from the grassroots. Farmers should use mobile phones to know market prices for their produce and these phones should be affordable to them, “the president noted.

Kagame thanked the private sector for supporting Gir’ Inka and Agaciro Development programmes. “Providing for ourselves is a foundation of our dignity. We haven’t started using the Agaciro Fund, but if it starts the benefits will be immense and not based on criticisms.”

He said that Rwanda exports should increase and reduce on imports saying that what the country imports doubles five times what it exports.

At the event, some of the members of the business community shared their testimonies about the transformation of their small businesses into huge investments due to the country’s good leadership.

At the occasion, Faustin Kananura Mbundu, Chairman of the PSF highlighted the achievements and challenges within the private sector and thanked the Head of State for honouring their invitation at the event.

“As members of the private sector we are committed to contribute to the country’s development but we need strong partnership from the public sector,” he said.

The private sector dialogue has been taking place since 2006.

In October the government, in partnership with the private sector, launched a platform where the private and public sectors come together to improve the business environment. The initiative dubbed Rwanda Private Public Dialogue (RPPD) will be facilitated by the Private Sector Federation (PSF) and Rwanda Development Board (RDB).

RSSB raises over Rwf300bn

• By Jean d’Amour Mbonyinshuti By Jean d’Amour Mbonyinshuti

RSSB headquarters. The organization has raise up to Rwf300bn. The New Times / T.Kisambira.

Records from the Rwanda Social Security Board (RSSB) indicate that so far over Rwf 300 billion has been raised since the merger last year between the Social Security Fund of Rwanda and Rwanda Medical Insurance Company (RAMA).

Afrique Ramba, the Deputy Director General of RSSB confirmed to Sunday Times last week.

 He said the new figure represents a steady increase in investments compared to Rwf 143.7 billion invested in 2009 and 286.6 billion late in May, 2012.

Information indicates that according to the board’s investment policy, the investments are intended to act as a framework in which money remitted by its clients can be successfully invested for profit.

According to Innocent Nyirishema, the Director of Contributions at RSSB, despite the amount raised, the body is still facing challenges of employers who do not remit deducted funds.

 “Paying pension is a must. The law indicates that the employer should pay pension to whomever he or she employs without basing on what he or she does or the duration,” Nyirishema explained.

He added that there was a misconception that an employee is paid the pension when he or she is permanent or he or she works in offices.

 “There are different cases, employers can be honest hundred percent, some cases are caused by the capacity of institutions who are not able to pay, others are unwilling. We can’t tell who and who but we have cases in general,” he added

Workers’ Trade Union (CESTRAR) confirmed that employers have continued to harass and fire employees unfairly, though Rwanda is a signatory to international convention guaranteeing workers’ rights.

RSSB overshoots target by Rwf2.5b

•  
•  Murekezi (L), welcomes Prime Minister Habumuremyi to King Faisal Hospital as Binagwaho, and Dr. Alex Butera, the facility’s CEO look on. The New Times/Timothy Kisambira.
• By Ivan R. Mugisha
• February 18, 2013

Over Rwf39.4b was collected by the Rwanda Social Security Board (RSSB) in the first semester of 2012/2013 financial year, a feat attributed to increased in compliance from both private and public entities.

This was Rwf2.5b above the targeted collections over the period. The pension body had targeted Rwf36.9b collections over the first half of the financial year, from July to December 2012.

The board collected Rwf33.09b over the same period in the 2011/2012 financial year, with new registered employers and employees at 4,347 and 36,246 respectively.

The resounding performance stems from a higher registration of employers in the body’s pension and medical schemes since the merger between the former Social Security Fund of Rwanda and Rwanda Medical Insurance Company in 2011.

“The newly registered employers in the pension scheme during the period under review were 5,050, against a target of 4,750. We also registered a total of 43,935 new employees,” Moses Kazoora, the RSSB public relations and communications unit director, said.

Kazoora added that the registered number of new members in the medical scheme was 19,826, which was almost double the projected figure of 10,000 new members.

He said RSSB paid benefits amounting to Rwf10.1b to both pension and medical claims over the period, which was an increase compared to the same period of last financial year, where benefits paid amounted to Rwf8.1b.

Kazoora said the body was urging more entities to register for social security, adding that they projected Rwf40.62b collections in the second half of the 2012/2013 financial year.

“Companies are currently undergoing auditing processes to ascertain their level of compliance as regards to registering pension and health benefits for their employees with the board,” Kazoora added.

Available statistics from the body indicate that by 2011, close to 40 per cent of Rwanda’s businesses did not pay monthly contributions to the body as required by law,  a situation that left several citizens’ accounts empty on retirement.

To solve the problem, the body introduced a tracking system that identifies defaulters and takes appropriate action, including slapping them with fines of up to three per cent on each unpaid month, as well as auctioning their property, if the problem persists.

RSSB has spent over 30 per cent of the monies collected, equivalent to Rwf94.4b on its investment portfolio, with real estate development as the major project.

Contact email: ivan.mugisha[at]newtimes.co.rw

Concealing facts could cost you insurance compensation

When policyholders present claim forms, some insurers develop ‘cold feet’ and start looking for unintentional blunder in the cover documents to discredit the application. Photo/FILE 

By JOHN NJIRU jnjiru@ke.nationmedia.com
Posted  Thursday, February 28  2013 at  02:00

In Summary

• Many insurance companies capitalise on your omission of certain information to reject your claim

When Joy’s family visited a local insurance company to report the death of their daughter, they believed that her funeral benefits would be paid in time and the hospital bill sorted out. However, this was not to be.

The policy seller said the deceased had omitted some “vital” information upon filling the insurance application form and was, therefore, not entitled to compensation.

Her elderly parents were shocked. Not long before that, their daughter had told them that she had taken the cover and that she had appointed them her next of kin.

She had paid the premiums on time, a fact that the insurer did not dispute. However, her family could not claim her investment because she had omitted crucial details on her health.

At the time she applied for the medical cover in 2009, Joy was suffering from lupus, which had plagued her since childhood, but she did not indicate this in the form.

The underwriter declined to pay the claim, saying Joy had failed to answer a question correctly — whether she often felt faint during her daily activities.

Lupus is an autoimmune complication where the body’s immune system becomes hyperactive and attacks normal body tissues.

Apparently, the omission of the answer to the question had invited such “grave” consequences, according to the insurer, that no reimbursements would be released.

However, after a series of court cases and exchange of demand letters, the insurer was pushed to release the funds, albeit late, to the mourning family.

This situation is a reflection of the realities that a number of insurance consumers grapple with when seeking cover claims despite having faithfully paid their premiums.

Blueprint blunder

Quite often, insurance companies develop cold feet when consumers present compensation claims.

They diligently scour the application form for an “error” or intentional blueprint blunder to discredit years of premium payments already safely in their coffers from their clients.

Some even have no qualms trying to make the consumer look bad and guilty.

Consumers have now been asked to do the only thing at their disposal and compel the “cold feet” insurers to pay up by fighting for what is rightfully theirs.

Medical insurance companies and their motor vehicle counterparts are the most notorious. At best, they delay payments, hoping that the customer will give up and abandon the claim.

The number of complaints the insurance regulator received last year rose compared to previous years, largely driven by claims disputes.

The Insurance Regulatory Authority (IRA) says that by the end of August 2012, it had received 492 complaints, a sign that consumers are increasingly understanding the importance of reporting abnormalities on claims settlement.

 There were 554 complaints in 2011, 633 in 2010, and 744 policy holders who felt disgruntled with the services of their insurers and reported their woes.

“These complaints have created a perception that has led to a credibility crisis affecting the uptake of insurance products and affected the growth of the industry,” said IRA’s chief executive Sammy Makove.

The most frequent complaints reported were delayed or non-settlement of claims where policy holders say the insurer has not paid their claims as expected.

Other complaints include delays in payment of maturity benefits, lack of help at the insurer’s branch offices, delays in issuance of stop orders to employers, and erroneous deductions of premiums.

But insurers, especially in the medical field, have insisted that consumers, with the connivance of medical personnel, have devised ways of fleecing them by filing fake claims.

To counter this, medical insurers have introduced smart cards with the biometric details of the customer as a way of cushioning themselves from the increasing fraud.

This aims to ensure that only the customer with matching details receives treatment from specified medical centres.

But even this method is not foolproof because of the well-coordinated collaboration between doctors and clients.

The “insensitive” levels of coordinated fraudulent activities between consumers and hospitals have consequently led to medical insurance companies delaying payment of claims as they seek to authenticate them.

Consumers are now being advised to prepare for a battle in filing claims.

Read the fine print

An insurance agent can simply reject your claim on grounds of technicalities; you failed to disclose something, or did not read this statement, or this is what you should have answered before signing the form, the insurer could claim.

It does not matter if the error is of little significance to the details of the claim, the insurer can make it stand out, then use it to refuse to pay.

To be on the safe side, ensure that you have read and understood all the fine details in an insurance cover document. It would also be wise to consult an expert before you sign on that dotted line.

Unending delays

This is one of the most widely employed tactics by insurers. One may be tempted to ask: “Are they waiting for my death to release the funds?”

Insurance companies are known to open files months after claims have been filed, resulting in unnecessary delays.

Perhaps they hope that the consumer will give up chasing the compensation and drop the matter altogether. This is common for pension payments, which sometimes take years.

Extra Costs

Have you ever heard of the word “excess”? This is a common reference in the motor insurance industry. The motor cover offers protection against financial loss, physical damage, injury, and liability.

Motor insurance excess is the percentage of the damages that the consumer is required to pay.

If the customer has an excess of say Sh43,000 and the total repair costs of the car stand at Sh258,000, then the consumer will be required to pay Sh43,000 and the insurer Sh215,000.

 

The underwriter imposes this fee as a form of co-insurance to force the owner to be more careful with the vehicle

Divorcing Boomers Double Their Retirement Woes

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Courtney Keating | E+ | Getty Images

Baby Boomers are divorcing at a surprising rate, and that will have huge implications for their lives in retirement.

The number of divorces among people 50 or older doubled from 1990 to 2010. And in that year, one in four U.S. divorces was in that age group.

And while the experts say it's a product of, among other things, longer life spans, Boomer divorce will affect retirement lifestyles.

"Gray divorce can be economically devastating for some people, especially for women who have been out of the labor force bearing children," says Susan Brown, professor of sociology at Bowling Green State University and co-author of the 2012 report "The Gray Divorce Revolution."

But it's a problem for everyone involved. Here's why:

That pool of money that was going to fund retirement for a couple will now be split in half, and must now fund retirement for two people living separately. That costs a lot more. And that means people must either temper those retirement lifestyle expectations or delay retirement altogether.

"You have the same pool of assets that has to sustain two sets of retirement," says Joe Sicchitano, senior vice president and head of financial planning at SunTrust Bank. "It can undermine good planning. You can have a well thought-out plan, and it will be undercut by divorce."

The biggest problems, say planners, is it costs considerably more to retire as two single people as opposed to a couple. Jason Wheeler, CEO of Pathfinder Wealth Management in Wilmington, Del., says it will cost 30 percent more. Joe Duran, financial planner and author of "The Money Code," says it will cost at least 50 percent more to retire for Boomers who divorce.

"That means you will have to delay retirement or save a lot more in these last few years," Wheeler says. "Or reduce your lifestyle. Often that is hardest for people.

"If they are planning on retirement at 65, and they are 60, it may push them back to 67 or 68," he says. "And those are the ones who have done (financial) planning. Those that didn't are even worse."

Post divorce, you take separate vacations; you have two cars instead of one; and you make twice as many trips to see the kids, Duran says. And costs may be even higher if you consider medical expenses, he says — if one partner gets sick, that spouse is no longer there to help take care of you.

"These are people getting towards the end of the careers in the labor market," says Bowling Green's Brown. "In your 20s or 30s you've still got time in your employment to make up for that loss. People 55 or 60, are so close to retirement, there's only so much time for them to make up the economic losses."

Some recommendations from the financial planners to help steer through divorce in the later years:

• Hire a financial adviser when you hire that divorce lawyer. Let them work together on a settlement that well help you ease into retirement. "One of the things they do, is they get divorced before they do any retirement planning at all," says Wheeler. "That is one of worst mistakes they can make."
• There is still time to save. "Even if you divorce in your 50s, you have 30 years to rebuild your savings and investment," says Kelvin Boston, host of Moneywise on PBS. "You can rebuild you savings, rebuild your credit report, but it will take some time."
• You have three choices, Duran says. Increase your savings and go back to work. Reduce your spending, and agree you both will live in smaller homes, travel less and eat out less. Or third, agree you are going to leave the kids less money.
• Don't try to support your adult children. "People get divorced and still want to help the kids or parents, and it's usually not possible," Wheeler says. "Kids, even adult children, 30 or 40 years old, still expect Mom to pay for a $30,000 wedding. Kids can't ask parents for as much money."
• Watch the lawyers' fees. Legal fees come out of the retirement pie pre-divorce, reducing what you will have to live on. And if there if a divorce after retirement, those costs are virtually impossible to replace.

"You're planning for a different lifestyle, no matter what, because things have changed," says Grant Connes, co-managing director of Global Wealth Management in Fort Lauderdale. "Adapting to the changes a lot of times means scaling back."

Duran says we should expect the divorce rate to go up among Boomers because now that people are living longer, they are having a second midlife crisis.

"It's the second wave of midlife crises," he says, "a late-stage midlife crises."

"Gray divorce reflects changing attitudes about marriage," Brown says. "We have much higher expectations today for what constitutes a successful marriage than earlier generations did. At the same time, society is more accepting of divorce as a solution to an unsatisfying marriage. For these reasons, gray divorce is probably here to stay."

At the end of the day it's just having a proper plan," Connes says. "Divorce is an unexpected roadblock. It's just about how you adopt that. At the end of the day that's what you have. And it's not easy on anybody."

Cheating on Taxes Is Not Cool, Say Most Americans

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Alija | Vetta | Getty Images

Americans may make plenty of jokes about cheating on their taxes, but a new survey finds that in reality most don't think it's OK to rob the tax man. Or at least, that's what they're telling the IRS Oversight Board.

The 2012 Taxpayer Attitude Survey, released Tuesday by the independent oversight board, finds that 87 percent of Americans don't think it's OK to cheat on your taxes. That's a three percentage point increase from last year.

Only 11 percent think it's OK to cheat, either a little or as much as possible.
Perhaps more surprising, 95 percent of Americans said their personal integrity influences them to report their taxes honestly, an 8 percentage point increase from five years earlier.

About 63 percent said they are influenced by fear of an audit, while 70 percent are motivated by third-party information that could show them to be a tax cheat.

The IRS Oversight Board, an independent body created by Congress in 1998 to oversee the Internal Revenue Service's actions, completed its annual survey of 1,500 Americans last August and September. The survey has a 3.1 percent margin of error.

If they're going to pay their taxes honestly, most Americans seem to think everyone else should, too.
The survey found that more than 90 percent of Americans think it's important that the IRS ensures that low- and high-income taxpayers, small businesses and corporations honestly pay their taxes, too.

Those results appear to show that Americans have come to feel more strongly in recent years that everyone should pay their fair share of taxes, and the IRS should vigorously enforce tax laws.

The results come as many Americans are either getting ready to file their 2012 income tax returns, or already have done so.
They also follow a bruising battle in Washington over the so-called fiscal cliff, a series of tax hikes and spending cuts that were scheduled to take effect until Congress reached a last-minute deal.

The fiscal cliff agreement raised taxes for wealthy Americans earning $400,000 or more and allowed taxes on capital gains and dividends to go up. It also ended a payroll tax holiday, meaning that most Americans are seeing more of their paycheck going to the tax man for Social Security and other entitlements this year.

How the Pope's Retirement Package Compares to Yours

It's good to be the pope - even a retired one, it turns out.

 

Pope Benedict XVI. (AP Photo/Pier Paolo Cito, files)As Pope Benedict XVI steps down on Thursday, his retirement package - the first one the Vatican has had to prepare in almost 600 years - would likely be considered a sweet deal by the average American senior, providing a steady income and generous perks.

Let's start with the basics: The pope emeritus will receive a monthly pension of 2,500 euros, according to Italian newspaper La Stampa.

That translates to almost $3,300, or close to the monthly maximum of $3,350 that Social Security will pay to an American who retires this year.

(More From CNBC: Cheating on Taxes Is Not Cool, Say Most Americans)

Few people will actually qualify for that amount. For starters, you would have to wait until 70 to retire. You would also have to spend most of your working life earning Social Security's taxable maximum pay, which is set at $113,700 this year.

"That's quite rare," said Richard Johnson, director of the program on retirement policy at the Urban Institute.

He pointed out that the average Social Security check is about $1,200 a month - not enough to pay for the typical American retiree's expenses.

(More From CNBC: Not-So-Golden Years - Over 75, and Crushed by Debt )

"For most people, if you look at the median, Social Security counts for about 40 percent of their income. So it's important, but people rely a lot on other savings, like pensions or 401(k) savings," Johnson said.

A big nest egg is not something the pope emeritus has to worry about. The Roman Catholic Church will cover his living expenses, provide him with a spacious home inside the Vatican and pay for everything from cooked meals to housekeepers, according to The Telegraph.

Such services are not available to the typical American senior, unless he or she pays for an assisted living facility or resides in a nursing home, Johnson said.

What about waiting to retire until 85, as Benedict did? The average American retires at about 64, so working that long is unusual, Johnson noted.

"If you have a job you love, it's great," he said.

"(But) just like the pope, the biggest determinant of retirement is health status. When your health starts to deteriorate, that's what often pushes people into retirement, sometimes earlier than expected."

Health care costs are one of the big risks that older Americans face, and while Medicare pays for the bulk of their expenses, many things are left uncovered, Johnson said. Meanwhile, the pope emeritus will continue to be a member of the Vatican's generous private health care policy, the BBC reported.

(More From CNBC: Divorcing Boomers Double Their Retirement Problems)

Bottom line: rent-free living, few out-of-pocket expenses plus thousands of dollars deposited into your account each month would probably constitute a good deal in most people's minds.

Of course, the pope is not most people. His financial health is of such interest that it recently got the Saturday Night Live treatment, with a mock ad showing a worried Benedict surrounded by a pile of unpaid bills and seeking the help of a financial planning firm called "Papal Securities." Motto: "Because heaven can wait."